Gay is pale and clearly fatigued late on this Friday afternoon when we meet as planned in the company’s tiny, bare-walled conference room. Gone is the bolshie businessman I spoke with earlier in the week by phone when he told me – with good humour – he had no desire to participate in a profile article for TasWeekend.

“If you lose a grand final, that’s it,” Gay had said. “You can’t go back and play it again.”

This is Gay’s admission that the other side has won, referring to what he calls “the extreme green groups” who undermined his plans for a pulp mill and – he says – manoeuvred behind the scenes to have him ousted from Gunns, the once-mighty timber giant he ran for nearly four decades. He similarly blames outside forces for his criminal conviction for insider trading in 2013.

Despite not wanting to be interviewed for a personal profile piece as such, Gay is happy to meet for a “general chat” about the timber industry in Tasmania. He makes it clear he has no interest in defending his legacy. Gay is comfortable in his own skin and content in the knowledge that those who in his mind matter still hold him in high esteem.

The 74-year-old, who was worth $50 million on paper at Gunns’ peak, is still in the industry he loves – albeit on a much smaller scale. Specialty Veneers was once a subsidiary of Gunns and was shut for four years after the company’s collapse, until Gay started it up again. In court, he was granted special leave to run the business, which has a small factory at Somerset and employs 35 people, including Gay’s daughter. He has another two years to go before he can serve as a company director on a larger company.

Gay admits that by the end of a working week he is exhausted. In 2007, he was diagnosed with prostate cancer. At the time, his doctor warned him that if radiation therapy did not work, he would have six months to live. The radiation bought him time but now Gay has secondary bone cancer.

The Hobart office of the Commonwealth Director of Public Prosecutions confirms Gay has paid the $500,000 pecuniary penalty he was slapped with under proceeds of crime laws late last year. “The lawyers have cost me more,” he says.

The Australian Securities and Investments Commission pursued the penalty after there was widespread criticism of the relatively minor $50,000 fine Gay copped in court after pleading guilty to insider trading. The criminality related to Gay selling $3 million of Gunns shares in 2009 while privy to price-sensitive information.

Gay reveals he is writing a book about Gunns, but not covering his court case or the period after his forced resignation from the company in 2010. In September 2010, Gunns’ replacement chief Greg L’Estrange declared the company would quit old-growth logging and transition to a plantation-only business in an unsuccessful attempt to shore up pulp mill investors. Two years later, the company went into receivership.

“I’m sure if I had stayed on and been left to carry on, the business would still be there,” Gay says. “It might have been smaller and with no pulp mill, but I’m sure the business would have survived.”

It has been a turbulent time for Tasmania’s timber sector since Gay’s ignominious downfall and the post-GFC collapse of the woodchip market. Many industry watchers, including conservationists and those who want to see an end to constant taxpayer prop-ups, had hoped the native forestry sector would be allowed to contract naturally. With the state-owned Forestry Tasmania posting a $67 million loss last year Resources Minister Guy Barnett says he has a plan to end subsidies without shrinking the industry.

Barnett’s solution to the woes of FT, which is losing money on more than a quarter of the trees it harvests, is to bring forward the felling of forests previously earmarked for future reserves, but leave it to the private sector to log the contentious areas. He is giving FT the optimistic new name of Sustainable Timber Tasmania, alleviating some of its non-commercial responsibilities such as firefighting and road maintenance, and lifting prices of sawlogs “to offset costly coupes”.

The new name is designed to reflect what Barnett hopes will be a return to a sound financial footing for FT, while, on the environmental front, the Government still hopes to achieve crucial endorsement of its management practices from the Forest Stewardship Council. FT has been told by FSC auditors it needs to lift its game in habitat protection and clear-felling old-growth forests before timber from state-owned native forests can be declared responsibly managed.

FT has since stopped clear-felling in coupes identified as containing more than 25 per cent old growth, although environmentalists are less than impressed by FT’s alternative practices, which one forest activist describes as clearing in strips rather than swathes.

Last month, environmentalists including Greens leaders past and present converged on the lawns of Parliament House in Hobart to oppose the Government’s plans to allow logging in 400,000ha of land set aside for potential future reserves under the now-defunct peace deal negotiated in 2012. Now classed as Future Potential Production Forest, the area was to be protected until 2020 and conservationists had hoped that by then a case would have been made to add the area to Tasmania’s permanent reserve system. But Barnett plans to make the forests available to private companies to log from 2018, a move that needs to be passed by parliament.

What initially looked like a public-relations disaster, sure to reignite conflict in the forests, is starting to look like a stroke of buck-passing genius. Barnett is effectively handballing responsibility for accessing these contentious forests to private companies.

The move will not affect FT’s existing bid for FSC certification, because the extra forests will come under the tenure of a different government entity. Companies wanting to access them will have to achieve their own third-party forest management certification for any logging operations.

Key industry spruikers such as Australian Forest Products Association chief Ross Hampton insist Tasmania’s forestry operations are world-class, even without meeting FSC criteria. But Hampton admits past practices were not “as they should have been”.

Gay is not willing to concede as much, saying Gunns’ operations were always carried out responsibly. “Gunns never decided what forests it would access, it was always the government’s decision,” he says.

He dismisses his reputation as an environmental vandal, calling himself a “conservationist”, a comment not likely to go down well with those who were around to witness the large-scale destruction of publicly owned native forests in Gunns’ heyday as it exported millions of tonnes of woodchips a year.

“It was never ‘John Gay is trying to do this’,” Gay says. “I was at the top of the company but I was being paid to do a job and work hard.”

The pile of woodchips is back at the Burnie port, but it is no longer the divisive symbol of Tasmania’s forestry industry it once was. These days, the chips are predominantly FSC-certified and plantation-grown from the coupes Gunns planted in preparation for the pulp mill that never eventuated.

Sydney funds manager New Forests bought 100,000ha of plantations from Gunns’ receivers a couple of years ago, along with two woodchip mills. Forico, the company set up to manage the assets, is on track to export 1.6 million green tonnes of woodchips this year, driving Tasmania’s total forest product exports above three million tonnes for the first time in five years.

As with everything forestry-related, Forico’s success is being used as ammunition by both sides as the age-old debate continues to rage over the future of the state’s timber industry. Barnett lauds the company as a beacon of positivity – proof, he says, the timber industry as a whole is back on track.

Environmentalists say Forico validates their arguments for a transition from native forests to plantations. Jenny Weber from the Bob Brown Foundation says the FT restructure would have been the perfect opportunity to transition out of state-owned native forests.

“It’s such a shame,” Weber says of Barnett’s decision to open up more native forests to the private sector. “We have such a missed opportunity here to be protecting native forests by transitioning out of native forest logging.”

Gay is also lamenting what he sees as a missed opportunity, not in the FT restructure, but with the resurgence of woodchip exports from Tasmania’s ports. “Those three million tonnes of woodchips are going to Asia to create jobs in Asia,” Gay says. “They would have been better used in Tasmania.”

Gay questions the long-term viability of a plantation-only company such as Forico once it has exhausted the harvest-ready resource it snapped-up in the Gunns asset sell-off. Although he is no longer in the chip industry, Gay says he knows enough to understand that shipping woodchips offshore is not profitable enough to cover the cost of growing trees.

“I believe it will be a great thing to really build an industry around plantation, but the only one that was really viable to pay for the high cost of growing trees was a pulp mill,” Gay says.

Over at Forico’s timber nursery at Somerset, the orange-clad workers are only visible from the waist up in a sea of gum tree saplings. “If anyone wants evidence that we are here for the long haul, we are replanting as we speak,” Forico general manager Bryan Hayes says, brushing off concerns from Gay and others about the longevity of Forico’s operation.

“This year we will replant more than 6000ha of plantations at a cost of $15 million. We currently have 65 tree planters out in the field. We are committed. Our 100,000ha of plantation will be revegetated back to plantation.”

Hayes says the “world has changed” since his days at Gunns, when he was the former company’s general manager of forest products.

“I’ve worked with these assets (plantations and mills) since 1972,” he says. “I spent many years working in the native forestry sector. I quite unashamedly speak about that because it’s what the industry was. But to me, today, we’re operating in a new paradigm.”

Timber industry stalwart and former government adviser Evan Rolley is well aware of the public-relations benefit that can be garnered from using plantations. Having helped lure the Malaysian company Ta Ann to Tasmania in 2006 when he was head of Forestry Tasmania, Rolley came out of retirement to join the company in 2012 at the height of ugly clashes between workers and activists.

Rolley helped negotiate the Tasmanian Forest Agreement peace deal, which saw Ta Ann paid $26 million by the Federal Government to compensate it for giving up 40 per cent of its timber supply. Although the agreement has since been “torn up”, Ta Ann is contractually obliged to source timber from forests agreed to under the peace deal.

Even if it could access the 400,000ha of forest that was earmarked for possible reserves under the deal and which Barnett wants to make available to loggers from 2018, Rolley says Ta Ann would not go there. “The only reason we have been able to maintain our position in the international markets is that very clear message about the pedigree of our wood supply,” he says. “The future for us is in combining our product (native timber veneer) with plantations.”

So far the best result that has been achieved — through collaboration with Forico and the University of Tasmania — is a plywood made from 30 per cent plantation and 70 per cent native. Despite the PR spiel, the company remains reliant on logs from native forests, much to the disappointment of some environmentalists who have long opposed Ta Ann’s presence in the state.

Architect Greg Nolan is the director of the university’s Centre for Sustainable Architecture with Wood. He says it is “unhelpful” to imagine Tasmania could start an industry creating advanced structural products such as cross-laminated timber, which can replace steel and concrete in multi-storey buildings. He says there are less ambitious opportunities to make products, such as simpler timber panels and veneer from native forest and plantation wood, that would otherwise be chipped. “We need to build some realism into the picture, and focus on products we can make and send off the island,” he says, pointing to Tasmania’s relative scarcity of construction projects and small population as impediments to any industry that requires almost as many designers as labourers.

“I’m hesitant to use the term ‘trust deficit’, but that’s what it is,” sawmiller Matthew Torenius says of the perceptions plaguing the native forestry industry. In theory, Torenius can see the benefit of expanding the area of land open for logging, but only if harvesting operations were scaled back to minimise waste.

But he says the history of conflict in Tasmania makes it unlikely a “log widely but lightly” approach would gain community acceptance. “The industry is completely different to what it was 10 years ago but we can’t move on because of the mistakes of the past,” he says.

Torenius’ family runs a small sawmill at Forcett in the South East. His parents came to Australia in the ’60s from Finland, which is one of the world’s biggest producers of timber products. Torenius dreams of a Tasmanian industry of which locals are proud, based on high-value products such as furniture. He is disappointed by the Government’s so-called Southern Residues Solution, which is seeing low-grade native logs shipped off to Asia in containers from Hobart’s Macquarie Wharf.

“Residues”, as the government likes to refer to the 80 per cent of material created by felling native forests, remains the ultimate conundrum for the timber industry.

“Nobody likes to see whole logs transported offshore,” Torenius says. “In an ideal world, you would like to think those logs could be processed on the island and exported as a higher-value product.”

Over at the Designed Objects Tasmania workshop in North Hobart, young furniture designer Scott van Tuil admits he is blissfully ignorant about the ins and outs of the forest wars of the past. Like Torenius, he wants to become part of a small to medium-sized furniture-manufacturing industry in Tasmania.

“I only graduated last year, but maybe I’m in a good position because I don’t know the history,” van Tuil says. “I do know that Tasmania has a rich heritage when it comes to timber and there’s an opportunity to build on that and take it in another direction.”

Van Tuil created his O-Bench, which is a finalist in the Tasmanian Design Awards, with the help of Tim Smullen, 29, another design graduate, who has just created a niche business machining and moulding wood with a five-axis CNC router he built.

The bench was made using veneer from Ta Ann, a product that appealed to van Tuil because of the relative lack of waste from veneer peeling compared with cutting saw logs into planks. He hopes to hone his technique to create products that can be replicated efficiently and precisely.

“There’s a big step between designing a one-off and getting it to the point where it can be manufactured at scale,” van Tuil says. “That’s where I’m at, at the moment.”

Back at the university, Nolan says that while reinvigorating furniture manufacturing in Tasmania is worthwhile, the “elephant in the room” remains the issue of what to do with wood residues. Nolan sees designers such as van Tuil and Smullen as an integral part of the future timber industry, but says they will never “put a dent” in the resource currently extracted from our native and plantation forests.

“No matter how good your production processes, there will always be residues,” he says, arguing a Tasmanian industry must be based on both high-value products and lower-value commodities.

“You can’t have your nice coffee table and then look the other way when the log trucks go past.”

Although Gunns’ receivers are still touting the possibility of a pulp mill as they look to sell off the last of the failed company’s assets and permits, talk around residues has largely moved on to the notion of wood-fired energy. Last year, Federal Parliament passed legislation to include native forest biomass in the Renewable Energy Target, and last month the State Government doled out $1.25 million in grants to councils and companies to investigate uses for wood waste. Many of the projects are focusing on bioenergy and biofuel. Although conservationists do not have major issues with companies using their own wood waste to create on-site energy, they vehemently oppose adding native forest biomass to Tasmania’s renewable energy mix.

When TasWeekend catches up with former Tasmanian Greens leader Peg Putt by phone, she is just wrapping up a trip to Europe, where she has been warning finance companies against investing in such ventures. “I am meeting with banks that invest in forestry and telling them what the no-go zones for investment are, including in Tasmania,” Putt says.

She describes industry claims that native forest biomass is carbon neutral as “akin to the flat Earth argument”, given the time it takes to restore a native forest’s carbon storage value. “While it’s often painted as renewable energy, it’s only renewable on very long time frames, hugely longer than the time in which we need to act on climate change,” she says.

From one veteran of the forest wars to another, I check back in with Gay by phone to see if he cares to comment on the issue. He is back to his usual hearty self, although he has just started a second round of chemotherapy, which he says is as unpleasant as anyone would expect. “It’s better than the alternative,” he quips.

Gay predicts any large-scale use for native forest residues will be met with pulp mill-style opposition. “A lot of people are trying to do something with that resource other than exporting it offshore,” he says. “But I find it hard to believe they’ll ever get a free run.”

As the industry tries to reset the narrative by achieving that so-called social licence Gunns always lacked, Gay appears to take some pleasure in the fact the contentious residues issue is no longer his problem. “I’m no longer on the team,” Gay says. “I played that game and I got beaten. I take the attitude that I lost and I move on.”

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